Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.19.3.a.u2
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Summary of Components of Income (Loss) from Continuing Operations before Provision for Income Taxes
The components of income (loss) from continuing operations before provision for income taxes consisted of the following (in thousands):
  
Years Ended December 31,
 
 
2019
 
 
2018
 
 
2017
 
United States
  $
 
112,425
     $
 
119,446
     $
 
100,031
  
Foreign
   
(4,913
 )    
(2,226
 )    
(805
 )
                         
  $
107,512
     $
117,220
     $
99,226
  
                         
Schedule of Provision (Benefit) for Income Taxes
The provision
(
benefit
)
for income taxes consisted of the following (in thousands):
 
Years Ended December 31,
 
 
2019
 
 
2018
 
 
2017
 
Federal:
   
     
     
 
Current
  $
 
22,638
     $
 
24,101
     $
 
28,993
  
Deferred
   
665
      
(268
 )    
13,249
  
                         
  $
23,303
     $
23,833
     $
42,242
  
                         
State:
   
     
     
 
Current
  $
7,718
     $
6,004
     $
5,883
  
Deferred
   
(507
 )    
162
      
(423
 )
                         
  $
7,211
     $
6,166
     $
5,460
  
                         
Foreign:
   
     
     
 
Current
  $
—
 
 
     $
—
     $
—
  
Deferred
   
68
      
(36
 )    
—
  
                         
  $
68
     $
(36
 )   $
—
  
                         
  $
30,582
     $
29,963
     $
47,702
  
                         
Significant Components of Deferred Tax Assets (Liabilities), Net
Significant components of the Company’s deferred tax assets, net consisted of the following (in thousands):
 
December 31,
 
 
2019
 
 
2018
 
Deferred Tax Assets:
   
     
 
Accrued expenses and bonuses
  $
2,481
     $
2,258
  
Bad debt and other reserves
   
2,744
      
1,840
  
Deferred compensation
   
13,346
      
13,337
  
Operating lease ROU assets, net
   
21,761
      
—  
  
Stock-based compensation
   
7,847
      
8,912
  
Deferred rent
   
—
      
1,470
  
Net operating and capital loss carryforwards
   
3,612
      
2,335
  
Other comprehensive income
   
—
      
330
  
State taxes
   
139
      
11
  
Other
   
328
      
25
  
                 
Deferred tax assets before valuation allowance
   
52,258
      
30,518
  
Valuation allowance
   
(3,921
 )    
(2,570
 )
                 
Deferred Tax Assets
  $
48,337
     $
27,948
  
                 
Deferred Tax Liabilities:
   
     
 
Fixed assets
  $
(4,422
 )   $
(4,086
 )
Operating lease liabilities
   
(20,117
 )    
—  
  
Prepaid expenses
   
(940
 )    
(789
 )
Other comprehensive income
   
(552
 )    
—  
  
Other
   
(184
 )    
(114
 )
                 
Deferred Tax Liabilities
   
(26,215
 )    
(4,989
 )
                 
Deferred Tax Assets, Net
  $
22,122
     $
22,959
  
                 
Components of Provision for Income Taxes and Income before Provision for Income Taxes
The provision for income taxes differs from the amount computed by applying the statutory federal corporate income tax rate to income before provision for income taxes and consisted of the following (dollars in thousands):
 
 
Years Ended December 31,
 
 
2019
 
 
2018
 
 
2017
 
 
Amount
 
 
Rate
 
 
Amount
 
 
Rate
 
 
Amount
 
 
Rate
 
Income tax expense at the federal statutory rate
  $
 22,578
     
21.0
 %   $
 24,616
     
21.0
 %   $
 34,729
     
35.0
 %
State income tax expense, net of federal benefit
   
5,698
     
5.3
 %    
4,550
     
3.9
 %    
3,577
     
3.6
 %
Wind
fall tax benefits, net related to stock-based compensation
   
(196
 )    
(0.2
 )%    
(1,535
 )    
(1.3
 )%    
(2,568
 )    
(2.6
 )%
Change in valuation allowance
   
1,351
     
1.3
 %    
677
     
0.6
 %    
170
     
0.2
 %
Effect of rate and other changes on federal deferred taxes, net due to enactment of Tax Cuts and Jobs Act (“the Act”)
(1)
    
—
      
—
      
—
 
 
      
—
      
11,644
      
11.7
 %
Permanent and other items
(2)
    
1,151
     
1.0
 %    
1,655
     
1.4
 %    
150
     
0.2
 %
                                                 
  $
 30,582
     
28.4
 %   $
 29,963
     
25.6
 %   $
 47,702
     
48.1
 %
                                                 
(1)
On December 22, 2017, the Act was enacted, which significantly changed the U.S. corporate income tax laws by, among other items, reducing the U.S. corporate income tax rate to 21% from 35% starting in 2018, further limiting 162(m) deductions and creating a territorial tax system with a
one-time
mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. As a result of the Act, the Company revalued its deferred taxes, net due to the changes in the U.S. corporate statutory federal income tax rate and recorded a net charge of $11.6 million in the provision for income taxes in 2017. The Company’s accounting for income tax effects of the Act was completed as of December 31, 2018.
(2)
Permanent items relate principally to compensation charges, qualified transportation fringe benefits, reversal of uncertain tax positions and meals and entertainment.
Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits
A reconciliation of the beginning and ending amounts of unrecognized tax benefits consisted of the following (in thousands):
 
Years Ended December 31,
 
 
2019
 
 
2018
 
 
2017
 
Beginning balance
  $
1,246
     $
—
     $
 
 
 
 
 
—
  
Gross increase (decrease) as a result of positions taken:
   
     
     
 
Prior periods
   
—
      
1,246
      
—
  
Current period
   
—
      
—
      
—
  
Settlement with tax authorities
   
—
      
—
      
—
  
Expiration of applicable statutes of limitation
   
(471
 )    
—
      
—
  
                         
Ending balance
  $
775
     $
1,246
     $
—